PROJECT SUMMARY Rheumatoid arthritis (RA) produces articular erosions by activating osteoclasts to resorb bone while suppressing the ability of osteoblasts (OBs) to build bone. These erosions are a major source of pain and disability in RA and are a primary endpoint in clinical trials. Importantly, patients with RA develop systemic osteopenia/osteoporosis that is not well controlled by current therapeutic agents. Therefore, it is critical to develop new agents that are anabolic for bone in the setting of inflammatory arthritis. We discovered that the adaptor protein Schnurri-3 (SHN3) profoundly suppresses new bone formation. Mice lacking SHN3 develop a progressive increase in bone mass due to augmented activity of OBs through enhanced Wnt signaling. Importantly for patients with RA, SHN3 expression in OBs is highly upregulated by TNF plus IL-17A, and SHN3 deficiency protects from suppression of OB differentiation by these cytokines. Therefore, inhibition of SHN3 is an attractive mechanism to promote bone formation to prevent or treat the systemic and/or local bone loss that accompanies RA. Finally, mesenchymal stem cells (MSCs) are a promising mechanism for repair of inflammation-induced bone loss and these cells may be genetically manipulated by deleting SHN3 to augment their potential to repair systemic bone loss in this setting. In this R21 application, we will test the hypothesis that SHN3 is a novel target to promote bone formation at sites of inflammation-induced bone loss in inflammatory arthritis and will determine mechanism. Aim 1 will test the hypothesis that SHN3 deficiency prevents TNF-induced systemic bone loss and augments bone healing. We will determine in Part A whether SHN3 deficiency prevents systemic bone loss using mice lacking SHN3 in MSCs in a limb-specific manner, crossed with TNF-transgenic mice. In Part B we will determine the molecular mechanisms by which SHN3 deficiency protects MSCs/OBs from the suppression of OB differentiation induced by pro-inflammatory cytokines. Additionally, using unbiased proteomics and phosphoproteomics, we will identify novel SHN3-interacting proteins and proteins regulated by SHN3 in MSCs/OBs upon TNFa and IL-17A stimulation. In Part C, we will determine whether SHN3 itself regulates the production of factors by fibroblast- like synoviocytes that inhibit OB differentiation/function, including IL-6 and DKK1.! Aim 2 will test whether SHN3-deficient MSCs can promote healing of inflammation-induced bone loss. We will test the ability of transplanted SHN3-deficient MSCs to restore systemic bone loss in TNF-transgenic mice. A synthetic peptidomimetic ligand-conjugated with alendronate (LLP2A-Ale) will be utilized to direct MSCs to the bone. Transplanted GFP-expressing MSC-derived OBs will also be subjected to transcriptome analysis and targets identified by multiple approaches will be prioritized for validation. These data will determine the mechanisms by which SHN3 mediates signaling between pro-inflammatory cytokines and the Wnt pathway in MSCs/OBs and identify new targets to promote anabolic bone formation in inflammatory arthritis.